|Day's Range||8,697.58 - 8,768.87|
|52 Week Range||6,190.17 - 8,768.87|
U.S. stocks shook off earlier losses and rallied Friday morning after Chinese officials said they had agreed on the text of a phase one trade deal with the U.S.
(Bloomberg) -- It started last Friday, with a blowout U.S. jobs report that beat all expectations. Then in quick succession late Thursday investors got news that the guns will be holstered in the U.S.-China trade war, and that Britain is lifting itself out of the quagmire of a hung parliament.Suddenly, all the worries about a global recession, yet another wave of tariff hikes between the world’s two largest economies and a messy U.K. breakup with the European Union are fading from view. It may be Friday the 13th, but those who made an early start on JPMorgan Chase & Co.’s call for risk-on trades in 2020 can count themselves lucky.The S&P 500 Index and Nasdaq Composite logged record closes Thursday, helping push MSCI’s all-country world gauge to its first all-time high since the eve of the global rout in January 2018, back when a stocks “melt-up” was the narrative of the day. In currencies, the yen fell and the yuan soared. Bond yields climbed, with 10-year Treasuries around 1.9% and their Japanese counterparts in recent days straddling 0% for the first time since March.The moves came on news that President Donald Trump signed off on a phase-one deal with China that averts the Dec. 15 introduction of another wave of U.S. tariffs. An official announcement is still pending, though, and U.S. futures saw only modest gains Friday morning. In the U.K., Prime Minister Boris Johnson cruised to a big majority, an election result that should guarantee passage of his Brexit deal with the EU.“The good news just seems to keep coming for markets,” said Kerry Craig, a Melbourne-based global market strategist at JPMorgan Asset Management. “Investors will be delighted to check their stockings and realize they won’t be receiving the lump of coal” they got last year, when global equities tumbled in the fourth quarter.In a stark contrast to the liquidity crunch of late 2018, the Federal Reserve has been a major ally for those bullish on risk this year-end. The U.S. central bank started injecting liquidity in October at a pace of $60 billion of T-bill purchases a month, and Chairman Jerome Powell said Wednesday if needed the initiative could adjust to buying coupon-paying securities as well.Bets on the Fed have shifted as risks eased over the past week. Futures trading suggests just a 69% chance of an interest-rate cut in 2020. Thursday last week, one cut was fully priced in, with a 13% chance of another one by the end of next year.The ground is shifting for others, too. As recently as a month back, the Bank of Japan was seen by some as needing to head deeper into negative territory with its policy rate. But now, with the yen weakening past 109 per dollar and Japan’s government embracing a fiscal-stimulus package, things look different.“We’re perhaps seeing the start of a strong yen decline -- Trump’s tweet, the Brexit results have flipped the yen on its head,” said Vishnu Varathan, head of economics & strategy at Mizuho Bank Ltd. in Singapore. “We could see haven demand wane into 2020. There might be even a last hurrah before the year-end as risk bulls get their way, and push the yen lower from here.”Bringing hope to both Japanese institutional investors and those the world over is the reduction in the pool of negative-yielding bonds. It shrank to $11.5 trillion as of Thursday, down from the record $17 trillion hit in August when the trade war was raging.How long the Christmastime cheer will last remains a question. On three of the key risks, doubts remain. Brave is the analyst that predicts smooth sailing in the U.S.-China relationship ahead; no American presidential candidate is running on the “be nice to China” ticket. Johnson’s looming majority may guarantee the U.K. leaves the EU in January, but the two will still need to negotiate a trade deal, meaning the “hard Brexit” scenario could yet be on the horizon.As for global recession risks, while the consensus is that growth will pick up in 2020 thanks to this year’s monetary easing and moves in a number of countries to embrace fiscal stimulus, that view isn’t universal. In Australia, an economy closely tied to demand for important inputs including coal and iron, asset managers even see the central bank adopting quantitative easing next year.And some warn that the U.S. presidential-election season, set to kick into high gear next month in the leadup to the Feb. 3 Iowa caucuses, could pose dangers. The populist platform from onetime front-runner Senator Elizabeth Warren has triggered warnings about the record-setting U.S. bull market for equities coming to an end.Even if all the good news stays intact, there’s the challenge of valuations. How much gas is there left in the tank after the S&P 500 soared 26% plus in 2019? In credit, U.S. spreads are also historically low.“I wish we had kept some of the good news for 2020,” Mark Matthews, head of research Asia at Bank Julius Baer & Co., said on Bloomberg TV. “What this is going to do is cause a really powerful rally into the year end, so what’s going to be left over to get priced in to 2020?”The plethora of riches this week includes Republicans and Democrats getting a bipartisan deal to fund the government before the Dec. 20 spending deadline. Meantime, investors have shrugged off the Trump impeachment story, confident that the Republican majority in the Senate means he’ll remain in office.For emerging markets, a newly solid Chinese yuan and a retreat in the dollar to the weakest since July offers encouragement. A weakening yuan that dragged developing nations’ currencies down with it had made dollar debt more expensive to service. The yuan Friday traded past the 7-per-dollar line that had briefly spooked markets earlier this year.“It feels like all the bricks in the wall of worry are falling at once,” said Peter Atwater, president of Financial Insyghts.(Adds comment in fifth paragraph.)\--With assistance from Garfield Reynolds, Cormac Mullen, Gregor Stuart Hunter, Tracy Alloway, Ruth Carson and Matthew Burgess.To contact the reporter on this story: Christopher Anstey in Tokyo at email@example.comTo contact the editors responsible for this story: Christopher Anstey at firstname.lastname@example.org, Joanna OssingerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Wall Street's main indexes hit record highs on Thursday following news that the United States had reached a "deal in principle" with China to resolve a trade war that has rattled markets for nearly two years. Wall Street has focused on the new round of tariffs, hopeful they would at least be delayed as the world's two largest economies make progress on an initial trade deal. The Dow Jones Industrial Average rose 220.75 points, or 0.79%, to 28,132.05, the S&P 500 gained 26.94 points, or 0.86%, to 3,168.57, and the Nasdaq Composite added 63.27 points, or 0.73%, to 8,717.32.
U.S. stocks hit record highs on Thursday after President Donald Trump tweeted that Washington was "very close" to a trade deal with Beijing and on a report that U.S. trade negotiators had offered to cancel a new round of tariffs on Chinese goods. The three main indexes opened lower but quickly gained ground after Trump's statement, which comes just days before the tariffs kick in on Dec. 15. The Wall Street Journal reported that U.S. negotiators have offered to slash existing levies by as much as half on roughly $360 billion of Chinese-made goods, supporting the rise.
Wall Street's main stock indexes ended modestly higher on Wednesday after the U.S. Federal Reserve held interest rates steady and signaled that borrowing costs are likely to remain unchanged indefinitely. After cutting rates three times earlier this year, the Fed left its benchmark rate at the target range of between 1.50% and 1.75%, a decision that was widely expected.
With the end of the year and the decade fast-approaching, Wall Street strategists have begun to deliver their expectations about where the stock market will close out 2020.
U.S. stocks were higher and Treasury yields declined Wednesday following Federal Reserve’s final monetary policy decision of the year. In this, central bank officials decided to keep key interest rates at current levels and telegraphed rates would remain on hold through next year.
Wall Street's main stock indexes were little changed on Tuesday, hovering near record highs, as investors awaited concrete news on whether U.S. tariffs on Chinese imports would take effect on Dec. 15, a potential turning point in the two countries' trade dispute that has convulsed markets. Stock futures got a boost in premarket trade when the Wall Street Journal said U.S. and Chinese trade negotiators are laying the groundwork for a delay in the tariffs. “The markets are totally holding their breath right now,” said Nela Richardson, investment strategist at Edward Jones.
Wall Street's indexes edged higher in choppy trading on Tuesday after a report that the United States and China were planning to delay a new round of tariffs set to kick in on Dec. 15. Officials from both sides also hinted at extending their trade talks, the Wall Street Journal reported. With the trade war continuing to take a toll on global growth, markets have been hoping for a delay in tariffs and looking for positive headlines on the talks.
With the trade war continuing to take a toll on global growth, markets have been hoping for a possible delay in tariffs and looking for positive headlines on trade talks between the two sides. "It's probably the best the market can expect right now," said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York. The Wall Street Journal also reported that officials from both sides hinted at extending trade talks.
Besides the trade deal deadline, investors are monitoring Washington politics, the North American Free Trade Agreement deal and the U.K. Brexit vote later this week.
The dollar eased and global stock markets slipped on Tuesday as uncertainty kept risk appetite in check days ahead of the Dec. 15 deadline for a new round of U.S. tariffs on Chinese imports. Investors were again torn between remarks that suggested a positive outcome to the 17-month U.S.-Sino trade war but also indicated a deal might not come until after U.S. presidential elections in November 2020. Prospects for an initial "phase one" trade deal look good, acting White House Chief of Staff Mick Mulvaney said at a Wall Street Journal event.
U.S. stocks pulled back on Monday from near-record levels, as Apple and healthcare shares fell and investors braced for a busy week of political and economic news, including a potential turning point in the U.S.-China trade dispute. Investor hopes of at least an initial U.S.-China agreement have helped push major stock indexes to record highs, with the benchmark S&P 500 hovering about 0.5% below its all-time high. "The market is ... in a little bit of a wait-and-see mode," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.
"There is optimism about the potential of a roll back or some positive news on trade that is keeping stocks where they are," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas. The latest data from China showed exports in November shrank for the fourth consecutive month, underscoring persistent pressures on manufacturers from trade tensions.
The S&P 500 and Nasdaq indexes edged higher on Monday, with investors keeping a close watch on headlines around U.S.-China trade as planned tariffs on Chinese imports kick in on Dec. 15. Beijing and Washington are negotiating a first phase trade deal aimed at de-escalating tariff disputes but they continue to wrangle over key details.
By the end of the week, the stock market ship had righted itself, moving higher on the back of fresh data on the labor markets and the stunning report on consumer sentiment. Both reports underscored the overall health of the U.S. economy while putting the major equity markets in a position to retest all-time highs this week.